ESCROW AGREEMENT
THIS ESCROW AGREEMENT dated as of September 24, 2004, made by and
between Xxxx Xxxxxxx (the "Pledgor"), Gryphon Master Fund, L.P. (the "Secured
Party"), and Xxxxxx X. Garden, P.C. (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Pledgor and the Secured Party are parties to a certain
stock pledge agreement (the "Stock Pledge Agreement"), dated as of September 24,
2004, pursuant to which 3,000,000 shares of Knightsbridge Fine Wines, Inc.
("Knightsbridge") common stock owned by the Pledgor (the "Shares") are to be
held as collateral to secure payment of that certain Promissory Note issued by
Knightsbridge to the Secured Party, dated September 24, 2004 (the "Promissory
Note") and performance under that certain Debt Restructuring Agreement between
Knightsbridge and the Secured Party, dated September 24, 2004 (the "Debt
Restructuring Agreement"); and
WHEREAS, the Pledgor and the Secured Party have requested that the
Escrow Agent hold the Shares in escrow pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE 1
TERMS OF THE ESCROW
1.1 The parties hereby agree to have Xxxxxx X. Garden, P.C. act as
Escrow Agent whereby the Escrow Agent shall receive the Shares in escrow and
distribute the same as set forth in this Agreement.
1.2 At or prior to the execution of the Stock Pledge Agreement, the
Pledgor shall deliver to the Escrow Agent certificates representing the (i)
Shares, (ii) stock powers executed by the Pledgor for each certificate
representing the Shares, and (iii) a letter addressed to the transfer agent for
the common stock of Knightsbridge authorizing the Transfer Agent to transfer
such Shares into the name of the Secured Party.
1.3 (a) Upon an Event of Default (as defined in the Promissory Note),
Escrow Agent is hereby authorized to release to the Secured Party (i) the
Shares, (ii) the stock powers, and (iii) a letter from the Pledgor authorizing
the transfer agent of the Company to transfer the Shares to the Secured Party.
(b) Upon payment in full of the Promissory Note, the Escrow Agent
shall return the Shares to the Pledgor, less any shares released to the Secured
Party pursuant Section 1.3(a).
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(c) Upon the Escrow Agent's completion of its obligations under
Sections 1.3(a) or (b), this Agreement shall terminate and the Escrow Agent
shall have no further obligations hereunder.
1.4 This Agreement may be altered or amended only with the written
consent of all of the parties hereto. Should the Pledgor or the Secured Party
attempt to change this Agreement in a manner which, in the Escrow Agent's
discretion, shall be undesirable, the Escrow Agent may resign as Escrow Agent by
notifying the Pledgor and the Secured Party in writing. In the case of the
Escrow Agent's resignation or removal pursuant to the foregoing, its only duty,
until receipt of notice from the Pledgor and the Secured Party that a successor
escrow agent has been appointed, shall be to hold and preserve the Shares that
are in its possession. Upon receipt by the Escrow Agent of said notice from the
Pledgor and the Secured Party of the appointment of a successor escrow agent,
the name of a successor escrow account and a direction to transfer the Shares,
the Escrow Agent shall promptly thereafter transfer all of the Shares that it is
still holding in escrow, to said successor escrow agent. Immediately after said
transfer of the Shares, the Escrow Agent shall furnish the Pledgor and the
Secured Party with proof of such transfer. The Escrow Agent is authorized to
disregard any notices, requests, instructions or demands received by it from the
Pledgor or the Secured Party after notice of resignation or removal has been
given.
1.5 The Escrow Agent shall be reimbursed by the Pledgor and the Secured
Party for any reasonable expenses incurred in the event there is a conflict
between the parties and the Escrow Agent shall deem it necessary to retain
counsel, upon whose advice the Escrow Agent may rely. The Escrow Agent shall not
be liable for any action taken or omitted by it in good faith and in no event
shall the Escrow Agent be liable or responsible except for the Escrow Agent's
own gross negligence or willful misconduct. The Escrow Agent has made no
representations or warranties to the Pledgor or the Secured Party in connection
with this transaction. The Escrow Agent has no liability hereunder to either
party other than to hold the Shares received by the Pledgor and to deliver them
under the terms hereof. Each party hereto agrees to indemnify and hold harmless
the Escrow Agent from and with respect to any suits, claims, actions or
liabilities arising in any way out of this transaction including the obligation
to defend any legal action brought which in any way arises out of or is related
to this Agreement. The Pledgor acknowledges that the Escrow Agent is not
rendering advice to it with respect to this transaction or otherwise. The Escrow
Agent has acted as legal counsel for the Secured Party and may continue to act
as legal counsel for the Secured Party, from time to time, notwithstanding its
duties as the Escrow Agent hereunder. The Pledgor consents to the Escrow Agent
acting in such capacity as legal counsel for the Secured Party and waives any
claim that such representation represents a conflict of interest on the part of
the Escrow Agent. The Pledgor understands that the Secured Party and Escrow
Agent are relying explicitly on the foregoing provisions contained in this
Section 1.5 in entering into this Agreement.
1.6 The Escrow Agent shall be obligated only for the performance of
such duties as are specifically set forth herein and may rely and shall be
protected in relying or refraining from acting on any instrument reasonably
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believed by the Escrow Agent to be genuine and to have been signed or presented
by the proper party or parties. The Escrow Agent shall not be personally liable
for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent
while acting in good faith, and any act done or omitted by the Escrow Agent
pursuant to the advice of the Escrow Agent's attorneys-at-law shall be
conclusive evidence of such good faith.
1.7 The Escrow Agent is hereby expressly authorized to disregard any
and all warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or processes of courts of law, and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree, the Escrow Agent shall not be liable to any of the parties hereto or
to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
1.8 The Escrow Agent shall not be liable in any respect on account of
the identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver this Agreement or any documents or papers
deposited or called for hereunder.
1.9 If the Escrow Agent reasonably requires other or further documents
in connection with this Agreement, the necessary parties hereto shall join in
furnishing such documents.
1.10 It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the documents
or the Shares held by the Escrow Agent hereunder, the Escrow Agent is authorized
and directed in the Escrow Agent's sole discretion (a) to retain in the Escrow
Agent's possession without liability to anyone all or any part of said documents
or the Shares until such disputes shall have been settled either by mutual
written agreement of the parties concerned or by a final order, decree or
judgment of a court of competent jurisdiction after the time for appeal has
expired and no appeal has been perfected, but the Escrow Agent shall be under no
duty whatsoever to institute or defend any such proceedings or (b) to deliver
the Shares and any other property and documents held by the Escrow Agent
hereunder to a state or federal court having competent subject matter
jurisdiction and located in the State of Texas in accordance with the applicable
procedure therefor.
ARTICLE 2
MISCELLANEOUS
2.1 No waiver of any breach of any covenant or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision herein contained. No extension of
time for performance of any obligation or act shall be deemed any extension of
the time for performance of any other obligation or act.
2.2 This Agreement shall be binding upon and shall inure to the benefit
of the permitted successors and assigns of the parties hereto.
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2.3 This Agreement is the final expression of, and contains the entire
agreement between, the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto. This Agreement may not
be modified, changed, supplemented or terminated, nor may any obligations
hereunder be waived, except by written instrument signed by the party to be
charged or by its agent duly authorized in writing or as otherwise expressly
permitted herein.
2.4 Whenever required by the context of this Agreement, the singular
shall include the plural and masculine shall include the feminine. This
Agreement may be executed in two or more counterparts, all of which taken
together shall constitute one instrument. Execution and delivery of this
Agreement by exchange of facsimile copies bearing the facsimile signature of a
party shall constitute a valid and binding execution and delivery of this
Agreement by such party. Such facsimile copies shall constitute enforceable
original documents.
2.5 This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Nevada without regard to principles of conflicts
of law. The parties hereby agree that all actions or proceedings arising
directly or indirectly from or in connection with this Agreement shall be
litigated only in the United States District Court for the Northern District of
Texas located in Dallas County, Dallas, Texas. The parties consent and submit to
the jurisdiction and venue of the foregoing court and consent that any process
or notice of motion or other application to said court or a judge thereof may be
served inside or outside the State of Texas or the Northern District of Texas
(but with respect to any party hereto, such consent shall not be deemed a
general consent to jurisdiction and service for any third parties) by registered
mail, return receipt requested, directed to the party being served at its
address provided in or pursuant to Section 2.6 below (and service so made shall
be deemed complete three (3) days after the same has been posted as aforesaid)
or by personal service or in such other manner as may be permissible under the
rules of said court. Pledgor hereby waives any right to a jury trial in
connection with any litigation pursuant to this Agreement.
2.6 All notices (including other communications required or permitted)
under this Agreement must be in writing and must be delivered (a) in person, (b)
by registered or certified mail, postage prepaid, return receipt requested, (c)
by a generally recognized courier or messenger service that provides written
acknowledgement of receipt by the addressee, or (d) by facsimile or other
generally accepted means of electronic transmission with a verification of
delivery. Notices are deemed delivered when actually delivered to the address
for notices as follows:
To Secured Party:
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Gryphon Master Fund, L.P.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Escrow Agent:
Xxxxxx X. Garden, P.C.
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Garden, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Pledgor:
Xxxx Xxxxxxx c/o
Knightsbridge Fine Wines, Inc.
Xxx Xxxxxxxx Xxxxx Xxxx
Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: 000-000-0000
With a copy to:
Law Offices of Xxxxx X. Xxxxxxx, PC
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party may by written notice as set forth herein change the address
or telephone/fax numbers to which notices or other communications to it are to
be delivered or mailed.
2.7 By signing this Agreement, the Escrow Agent becomes a party hereto
only for the purpose of this Agreement; unless otherwise agreed to in writing by
the Escrow Agent, the Escrow Agent does not become a party to any other
documents between the parties.
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2.8 Each party acknowledges and agrees that this Agreement shall not be
deemed prepared or drafted by any one party. In the event of any dispute between
the parties concerning this Agreement, the parties agree that any rule of
construction, to the effect that any ambiguity in the language of the Agreement
is to be resolved against the drafting party, shall not apply.
2.9 This Agreement may be executed in counterparts, each one of which
will constitute an original and all of which taken together will constitute one
document. This Agreement may be executed by delivery of a signed signature page
by fax to the other parties hereto and such fax execution and delivery will be
valid in all respects.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
SIGNATURE PAGE FOLLOWS
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EXECUTED:
Pledgor:
-------------------------------------------
Xxxx Xxxxxxx
Secured Party:
Gryphon Master Fund, L.P.
By: Gryphon Partners, L.P.,
its General Partner
By: Gryphon Management Partners, L.P.,
its General Partner
By: Gryphon Advisors, L.L.C.,
its General Partner
By:
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Xxxxxx X. Garden, Authorized Agent
Agent:
Xxxxxx X. Garden, P.C.
By:
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Name: Xxxxxx X. Garden
Title: President
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